Tyson Foods, Inc. (NASDAQ:TSN) Files An 8-K Other Events

Tyson Foods, Inc. (NASDAQ:TSN) Files An 8-K Other Events

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Item 8.01 Other Events.

On December 15, 2016, we were notified of a ruling by an agency
of the Republic of the Philippines in litigation we have
previously disclosed in our quarterly and annual filings under
the Securities Exchange Act of 1934. For further description
regarding this matter, refer to Part II, Item 8, Notes to
Consolidated Financial Statements, Note 19, Commitments and
contingencies, of Tyson Foods, Inc. Annual Report on Form 10-K
for the fiscal year ended October 1, 2016. This ruling, which is
the latest development in an appeal involving litigation that has
been ongoing for 20 years, will be challenged in further
proceedings before the agency that issued it and through
additional judicial proceedings should the agency not reverse
what we believe to be clear errors of law and procedural defects
in its ruling.
The ruling at issue was made by the National Labor Relations
Council (the NLRC), an agency of the Department of Labor and
Employment in the Republic of the Philippines. In its ruling, the
NLRC affirmed and expanded a labor arbiters 2004 finding that our
subsidiary, The Hillshire Brands Company (which was acquired by
us in 2014 and was formerly known as the Sara Lee Corporation),
Aris Philippines, Inc. (a dissolved former subsidiary of Sara Lee
Corporation), Sara Lee Philippines, Inc. (a former subsidiary of
Sara Lee Corporation sold in 2010) and Fashion Accessories
Philippines, Inc. (an unaffiliated entity) are jointly and
severally liable for approximately $70 million in damages, based
upon todays exchange rate, to approximately 6,000 former
employees of Aris Philippines in connection with a 1995 plant
closure of a former apparel operation of Sara Lee Corporation.
The NLRC approved a settlement agreement previously reached with
1,081 former employees for approximately $1.5 million but
significantly increased the total damages awarded by the labor
arbiter in 2004 to former employees who had not settled. With
respect to the remaining 4,922 former employees the NLRC awarded
approximately $300 million, based upon todays exchange rate, for
(i) back pay from 1995 when the plant was closed until the
present; (ii) severance benefits based on a years of service
calculation for each employee that included the years the since
the plant was closed in 1995; (iii) moral damages; (iv) punitive
damages; and (v) attorneys fees.
We intend to file a motion for reconsideration with the NLRC. If
that motion is denied, the Company will seek a stay of the
damages award pending completion of an appeal to the Philippine
courts. The Companys financial statements since the acquisition
of The Hillshire Brands Company have included an accrual for this
matter at an amount substantially below the labor arbiters 2004
finding. As part of our normal quarterly financial reporting
process, we will evaluate that accrual in consultation with our
legal advisors and accountants based on the facts and
circumstances as they exist at the time of our next quarterly
report filed on Form 10-Q. The need for, or potential amount of,
any such adjustment has not yet been determined, but we do not
presently expect to accrue the full amount of the award made by
the NLRC in this latest ruling.
We believe we have substantial defenses to the claims made and
intend to vigorously defend this matter. Neither The Hillshire
Brands Company nor any of its subsidiaries has any operations in
the Republic of the Philippines.
A copy of the Companys press release regarding this matter is
attached to this Form 8-K as Exhibit 99.1 and it is incorporated
by reference in its entirety into this Item 8.01.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number> Description
99.1
Press release, dated December 20, 2016, stating the
response of Tyson Foods, Inc. to a Republic of the
Philippines National Labor Relations Council ruling


About Tyson Foods, Inc. (NASDAQ:TSN)


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